Demand pushes construction
The steady flow of migrants into New Zealand should continue to support demand for buildings and houses over the next year, says surveying firm Rider Levett Bucknall.
And given that population growth was very strong in Auckland – where a large percentage of migrants settle – it would continue to have the greatest overall demand for construction work, said Rider Levett Bucknall director Grant Watkins.
While there had been a decline in residential and non-residential construction in the June quarter, the number of consents granted over the past 18 months suggested a pickup in demand in the second half of this year.
Its third-quarter report on the construction sector, Forecast 93, comes as Statistics New Zealand reports that migration added a net 56,000 people to New Zealand’s population in the year to June.
ASB economist Mike Jones said the numbers were higher than the ASB bank, and the Reserve Bank, had been expecting and a migration ‘‘second wind’’ had been running for 14 months. But net immigration would continue to trend lower over the next few years.
Watkins said the new and revised migration data from Statistics New Zealand pointed to net migration inflows remaining solid.
‘‘This migration-led population growth should continue to support construction demand over the coming year.’’
Although Canterbury’s share of construction had fallen over the past year, the number of consents issued pointed to stronger construction demand there.
He felt that should flow through in the coming year.
Meanwhile, Wellington was starting to have a greater share of total construction activity, largely stronger commercial construction.
Residential building had been surprisingly flat over the past year despite the surge in Wellington house prices. In commercial construction, Auckland and Canterbury were the strongest performers over the past year.
Strong demand for education and social buildings drove construction in Canterbury.
In Auckland, non-residential construction demand had eased in recent months but demand still grew over the year.
In the Waikato, hotel construction boosted building activity in the non-residential sector.
A further drop in interest rates would support demand for housing and construction work.
Although stand-alone houses were still the most popular, consents for multi-unit dwellings had surged over the past year, particularly for townhouses and flats.
The Forecast 93 report was prepared for Rider Levett Bucknall by the New Zealand Institute of Economic Research.